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Infrastructure Stocks for 2009

Written By Nick Hodge

Posted January 7, 2009

Look at these deals:

  • Calgon Carbon wins $5M drinking water contract in San Francisco

  • Insituform lands $13M in Atlanta sewer work

  • Jacobs Engineering announces 3 projects

  • EnerNOC signs 50 megawatt contract with Salt River Project

There are a few common threads that stitch these, and many other recent deals, together.

First, they’re all infrastructure-related projects, either for our water or power grid systems.

Second, all the companies mentioned are publicly-traded, have been climbing in light of the news, and have made investors in the know a nice chunk of change over the past week or so. I’m talking 20% runs in some cases.

Third, all of these infrastructure stocks, and many more, will continue to rise in 2009 in step with the progress of the massive infrastructure stimulus package now being hashed out by Congress.

The time to load up is now, as Congress went back to work yesterday and is promising no less than a $750 billion aid package to be ready to sign in about a month’s time.

Floods Cause Damage, Profits

The plan, called the American Recovery and Reinvestment Plan, is being hailed as both good politics and good policy. Some of the money will go tax breaks for millions of working Americans, but a large chunk will be aimed at "shovel-ready" infrastructure projects that will solve serious problems while getting people back to work.

You see, in any given year, about 250,000 water main breaks occur in North America. Most of our water pipes date back to WWII or prior; some of them are even wooden.

Our failing water system causes billions of dollars in damage each year via floods, accidents, road damage, and power outages.

According the American Society of Civil Engineers (ASCE), the country needs about $12 billion annually to "replace aging facilities and comply with safe drinking water regulations." The Federal budget allowance, at about $850 million, is less than 10% of the required total.

The coming stimulus is aimed at filling that funding void. As Federal money is freed up, we’ll begin to see dozens of new projects like those listed above. Related stocks will rise as fast as the projects are announced.

So pouncing on the right water companies now, like readers of the Alternative Energy Speculator have been doing, will pay off handsomely in the new year, and down the road.

Infrastructure Stocks: Blackouts & Bull Runs in 2009

Our electric infrastructure isn’t any better.

The power grid is slow and outdated. Utilities still use wall maps and pushpins to find the exact location of a power outage. But new, intelligent equipment, will alleviate that by communicating outages and maintenance needs wirelessly to a utility’s headquarters.

There is also not enough transmission capacity for surging demand, which leads to blackouts and brownouts on hot days when air conditioners are cranking.

Renewable energy has also presented a problem for the grid. The best locations for wind farms and solar parks are remote, sometimes hundreds of miles away from the nearest power line.

Part of the coming multi-billion stimulus will also go to upgrading the grid. New transmission lines, energy efficiency projects, and smart grid technologies will all be on docket to receive government cheese.

In its most recent "Infrastructure Report Card," the ASCE noted, "investment in transmission lines during the next 10 years is expected to be $3 billion to $4 billion per year, while the line-miles of transmission added will be only one third the rate of electricity demand."

As you can see, $4 billion per year simply isn’t enough. But billions more are being freed up, and are about to be delivered.

Public companies getting that funding are also going to be Wall Street darlings this year as a massive bull run in infrastructure gets under way.

I’ve compiled a brand new report so that my readers can play it for all it’s worth. To coincide with the report, I recommended 10 new infrastructure stock plays guaranteed to pay off in the next few months.

I want to give the report to you. Take a few minutes to read all about it.

You’ll be taking this bull by the horns in no time.

Call it like you see it,

nick hodge